Inequality

The purpose of this lesson is to understand how inequality is measured by economists and politicians by having students create a Lorenz Curve using data from Major League Baseball. Students will compare inequality in a baseball division with inequality in the league as a whole. This activity will allow students to engage in a discussion around income inequality. The entire plan takes about 1 hour to complete.

 

Educators start by explaining how income inequality exists in every country around the world and isn't necessarily a good or bad thing. One of the focuses of this lesson is to analyze inequality from a positive position rather than a normative stance. Politicians and economists are concerned about inequality as it becomes more pronounced. Even in Major League Baseball, there are some rich teams (Boston Red Sox) and some poor teams (Oakland As).

Fenway.jpg

Photo by Jeff Nyveen (Flickr)

5028848243_4ec063d179_o.jpg

Photo by Craig Howell (Flickr)

This is a recurring theme throughout the movie as Billy Beane attempts to take his small-market Oakland As and have them compete against the big spending teams from Boston and New York. Here's a scene from early in the movie when Beane is trying to get his scouts to realize that they're playing an unfair game and that there are rich teams, poor teams, and then the Oakland As are somehow worse:

Most governments, and even Major League Baseball, attempt to redistribute income to help the least fortunate. In many countries, this is done with taxes, but in Major League Baseball this is accomplished using revenue sharing. These policies are intended to decrease the income inequality in a country or within the league. In order to make these decisions though, it's important to measure the income distribution in existence. In this lesson, students will learn how to measure inequality by creating a Lorenz Curve.

Worksheet Activity
(Download the handout)

Explain to students that the first step in graphing a Lorenz Curve is to collect data for the population. Because there are so many teams in Major League Baseball, it's easier to look at smaller groups and compare the inequality in MLB Divisions instead. Students select a division in Major League Baseball, calculate the share of spending performed by each team in their division, and then graph the Lorenz Curve for that division relative to the rest of Major League Baseball.

The activity PDF linked above includes handouts for students, data on spending in Major League Baseball for 2021, and a sample key for the American League West division in 2021. Students will be asked to plot the Lorenz Curve for a single division of their choosing, but educators could assign students to groups and create 6 groups to represent the six divisions. To bring the course together, each group can plot their Lorenz Curve on a class chart to show the inequality across the different divisions in Major League Baseball.

An example of a Lorenz Curve for Major Leauge Baseball (blue line) and the American League West (orange line):

Lorenz Curves.png

Teaching Economics with 

Moneyball